Exchange Fund Investment (EFI) should remain in existence after it completes its mission of selling the bulk of the government's Hong Kong stock portfolio, according to a director. Chan Kam-lam said EFI should be retained to manage the rump of the portfolio so the government would not be directly involved in the stock market. EFI was set up in October 1998 to manage the stock portfolio the government bought for HK$118 billion during its controversial market intervention in defence of the currency peg. The share custodian on Wednesday began selling the final HK$6 billion batch of units in the Tracker Fund, the vehicle it set up in 1999 to dispose of the portfolio. The EFI board would meet soon to discuss whether it should be dissolved or take on a new role after this quarter's sale was completed, Mr Chan said. He personally felt EFI would be needed after the disposal, but the final decision would be taken by the board. If EFI could not sell all HK$6 billion worth of Tracker Fund units in the fourth quarter, it would hold the unsold units in the Exchange Fund rather than resume sales in the new year. 'EFI wants to make it clear that it will not sell any more shares from the government portfolio next year. The disposals will come to an end with the fourth quarter sale,' he told the South China Morning Post . Although EFI had completed its major task, it was still needed to manage the remaining HK$51.5 billion worth of government stocks being retained as a long-term investment in the Exchange Fund. The HK$51.5 billion portfolio represented 5.3 per cent of the Exchange Fund's assets, which stood at HK$961 billion at the end of August. The Hong Kong Monetary Authority (HKMA) manages the Exchange Fund's investments in bonds, international stocks and foreign currencies but has appointed EFI to manage the Hong Kong-listed stock portion to avoid conflicts of interest. With the disposal of the government portfolio to be completed at the end of this year, there has been speculation that the HKMA would resume management of the Hong Kong-listed stocks. Mr Chan said it was more appropriate for EFI to decide on investment guidelines to avoid the government being directly involved in the stock market. There might be other roles the custodian could play, he added. EFI has sold HK$140.8 billion worth of stock in the past three years through the Tracker Fund. Mr Chan said as soon as the last HK$6 billion had been offloaded, the government would have made a HK$98.6 billion profit from its Tracker Fund sales. EFI is chaired by Yang Ti-liang with 10 other board members including legislators, government officials and academics. It has only a handful of staff, with Marian Li Chan Sien-mun as chief executive. EFI has also hired external active and passive fund managers to invest the remainder of the government's stock portfolio.